Peloton vowed to slash expenses at the struggling fitness company, including labour and production costs, but disputed reports it had idled its factories to save money.
In a memo to staff, chief executive John Foley said Peloton was “right-sizing our production, and, as we evolve to more seasonal demand curves, we are resetting our production levels for sustainable growth.”
Peloton is reeling from a slowdown triggered by consumers emerging from pandemic lockdowns and returning to traditional gyms. It had been a Wall Street darling when customers were stuck at home and demand outstripped supply.
Now the company is considering job cuts to get itself back on track, Mr Foley said.
“In the past, we’ve said layoffs would be the absolute last lever we would ever hope to pull,” he said. “However, we now need to evaluate our organisation structure and size of our team, with the utmost care and compassion. And we are still in the process of considering all options as part of our efforts to make our business more flexible.”
Referring to reports that Peloton had temporarily shut down production, Mr Foley said leaks of confidential information “have led to a flurry of speculative articles in the press. The information the media has obtained is incomplete, out of context, and not reflective of Peloton’s strategy.”
He said the company had identified a leaker and was “moving forward with the appropriate legal action”.
Peloton also released a preliminary report of $1.14 billion in sales during the fiscal second quarter, which ended on December 31. Analysts estimated $1.16bn. The company ended the period with 2.77 million connected fitness subscribers, just below the 2.81 million prediction.
In that report, Mr Foley said Peloton was taking “significant corrective actions to improve our profitability outlook and optimise our costs across the company.” The effort “includes gross margin improvements, moving to a more variable cost structure, and identifying reductions in our operating expenses as we build a more focused Peloton moving forward.”
Mr Foley said he would share more information on the cost-cutting plan when Peloton gives its formal earnings report on February 8. “This work is still under way,” he said.
The early earnings release follows a report from CNBC on Thursday that the company was temporarily halting the manufacturing of bikes and Tread-branded treadmills. Production of Peloton’s main stationary bikes will be paused for two months, CNBC reported, citing internal documents. And the company will stop making its treadmill machine for six weeks, starting in February.
In the memo to staff, Mr Foley disputed the report, saying that “rumours that we are halting all production of bikes and Treads are false.”
The CNBC story sent the shares down 24 per cent to $24.22 in regular trading Thursday. Mr Foley’s remarks after the close boosted the stock, with it gaining 9.2 per cent as of 8pm in New York.
Mr Foley said on Thursday the company’s churn rate was 0.79 per cent, signalling that “members are sticking with us.”
Peloton’s chief executive said on the last earnings call that the company would be working to identify ways to cut costs. Peloton had spent millions of dollars on building up supply of its products to fulfil pandemic-fuelled demand, only for interest to sputter as economies began to reopen.
The company didn’t provide updated fiscal-year guidance on Thursday. Peloton said the previous quarter that it expects to generate revenue of $4.4bn to $4.8bn during fiscal 2022, which ends in June. That range was a reduction from earlier company projections of $5.4bn.
When Peloton slashed its 2022 guidance in November, the shares suffered their biggest decline ever. The company also said that month that the second quarter was off to a “softer-than-anticipated start”.
“We anticipated fiscal 2022 would be a very challenging year to forecast,” management said in a letter to shareholders at the time. “We will be taking concrete steps to re-examine our expense base and adjust our operating costs.”
ANDROID%20VERSION%20NAMES%2C%20IN%20ORDER
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Company%20Profile
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Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
White hydrogen: Naturally occurring hydrogen
Chromite: Hard, metallic mineral containing iron oxide and chromium oxide
Ultramafic rocks: Dark-coloured rocks rich in magnesium or iron with very low silica content
Ophiolite: A section of the earth’s crust, which is oceanic in nature that has since been uplifted and exposed on land
Olivine: A commonly occurring magnesium iron silicate mineral that derives its name for its olive-green yellow-green colour
Points to remember
- Debate the issue, don't attack the person
- Build the relationship and dialogue by seeking to find common ground
- Express passion for the issue but be aware of when you're losing control or when there's anger. If there is, pause and take some time out.
- Listen actively without interrupting
- Avoid assumptions, seek understanding, ask questions
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Timeline
2012-2015
The company offers payments/bribes to win key contracts in the Middle East
May 2017
The UK SFO officially opens investigation into Petrofac’s use of agents, corruption, and potential bribery to secure contracts
September 2021
Petrofac pleads guilty to seven counts of failing to prevent bribery under the UK Bribery Act
October 2021
Court fines Petrofac £77 million for bribery. Former executive receives a two-year suspended sentence
December 2024
Petrofac enters into comprehensive restructuring to strengthen the financial position of the group
May 2025
The High Court of England and Wales approves the company’s restructuring plan
July 2025
The Court of Appeal issues a judgment challenging parts of the restructuring plan
August 2025
Petrofac issues a business update to execute the restructuring and confirms it will appeal the Court of Appeal decision
October 2025
Petrofac loses a major TenneT offshore wind contract worth €13 billion. Holding company files for administration in the UK. Petrofac delisted from the London Stock Exchange
November 2025
180 Petrofac employees laid off in the UAE
The story in numbers
18
This is how many recognised sects Lebanon is home to, along with about four million citizens
450,000
More than this many Palestinian refugees are registered with UNRWA in Lebanon, with about 45 per cent of them living in the country’s 12 refugee camps
1.5 million
There are just under 1 million Syrian refugees registered with the UN, although the government puts the figure upwards of 1.5m
73
The percentage of stateless people in Lebanon, who are not of Palestinian origin, born to a Lebanese mother, according to a 2012-2013 study by human rights organisation Frontiers Ruwad Association
18,000
The number of marriages recorded between Lebanese women and foreigners between the years 1995 and 2008, according to a 2009 study backed by the UN Development Programme
77,400
The number of people believed to be affected by the current nationality law, according to the 2009 UN study
4,926
This is how many Lebanese-Palestinian households there were in Lebanon in 2016, according to a census by the Lebanese-Palestinian dialogue committee
BUNDESLIGA FIXTURES
(All games 4-3pm kick UAE time) Bayern Munich v Augsburg, Borussia Dortmund v Bayer Leverkusen, Hoffenheim v Hertha Berlin, Wolfsburg v Mainz , Eintracht Frankfurt v Freiburg, Union Berlin v RB Leipzig, Cologne v Schalke , Werder Bremen v Borussia Monchengladbach, Stuttgart v Arminia Bielefeld
More from Rashmee Roshan Lall
The Bio
Ram Buxani earned a salary of 125 rupees per month in 1959
Indian currency was then legal tender in the Trucial States.
He received the wages plus food, accommodation, a haircut and cinema ticket twice a month and actuals for shaving and laundry expenses
Buxani followed in his father’s footsteps when he applied for a job overseas
His father Jivat Ram worked in general merchandize store in Gibraltar and the Canary Islands in the early 1930s
Buxani grew the UAE business over several sectors from retail to financial services but is attached to the original textile business
He talks in detail about natural fibres, the texture of cloth, mirrorwork and embroidery
Buxani lives by a simple philosophy – do good to all
UAE currency: the story behind the money in your pockets
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Killing of Qassem Suleimani
UAE currency: the story behind the money in your pockets
Anghami
Started: December 2011
Co-founders: Elie Habib, Eddy Maroun
Based: Beirut and Dubai
Sector: Entertainment
Size: 85 employees
Stage: Series C
Investors: MEVP, du, Mobily, MBC, Samena Capital
WRESTLING HIGHLIGHTS
The President's Cake
Director: Hasan Hadi
Starring: Baneen Ahmad Nayyef, Waheed Thabet Khreibat, Sajad Mohamad Qasem
Rating: 4/5
GIANT REVIEW
Starring: Amir El-Masry, Pierce Brosnan
Director: Athale
Rating: 4/5
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Gulf Men's League final
Dubai Hurricanes 24-12 Abu Dhabi Harlequins
Red flags
- Promises of high, fixed or 'guaranteed' returns.
- Unregulated structured products or complex investments often used to bypass traditional safeguards.
- Lack of clear information, vague language, no access to audited financials.
- Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
- Hard-selling tactics - creating urgency, offering 'exclusive' deals.
Courtesy: Carol Glynn, founder of Conscious Finance Coaching
